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The market for home resales stays strong.
Despite sparse home inventory, the National Association of REALTORS® reports that 4.59 million existing homes were sold in February on a seasonally-adjusted, annualized basis. An “existing home” is a home that cannot be classified as new construction.
Last month’s sales data represents a 9 percent improvement from the year prior.
There are now just 2.43 million homes for sale nationwide — a 19% reduction versus a year ago. The complete home inventory would “sell out” in 6.4 months at the current sales pace.
Some analysts believe that a 6-month home supply indicates a housing market in balance.
The real estate trade group’s report contained other noteworthy statistics, too :
In addition, nearly one-third of all home sales “failed” last month, the result of homes not appraising at the purchase price; or, the buyer’s inability to secure mortgage financing; or, insurmountable home inspection issues.
Even accounting for last month’s high contract failure rate,though, the Existing Home Sales report still posted its second-highest reading since May 2010. For today’s Salt Lake City home buyer, the data may be a “buy signal”.
As compared to last fall, home supplies are down and home sales are up. Basic economics tell us that home prices should start to rise shortly — if they haven’t already. After all, the Existing Home Sales data is 30 days old, reporting on February. It’s nearly April today.
The good news is that homes remain affordable. With conforming and FHA mortgage rates in the low-4 percent range, home affordability is at its highest in history. Home prices may rise this spring, but at least your mortgage payment should remain low.
Foreclosure filings are fewer these days, according to foreclosure-tracking firm RealtyTrac.
In December 2011, the number of foreclosure filings nationwide fell 9 percent from the month prior. Not since November 2007 has foreclosure activity been this sparse across the country.
The drop does not appear to be seasonal, either.
Last month’s foreclosure filings were down 20 percent from December 2010 with “foreclosure filing” defined to include any one of the following foreclosure-related events : (1) The serving of a default notice, (2) A scheduled home auction, or (3) A bank repossession. As a result of a unexpectedly strong year-end, 2011′s annual foreclosure rate was the lowest in 4 years.
One reason why the year may have closed so strongly is that Nevada, California, Michigan and Arizona — four states typically associated with high rates of foreclosures — each posted big drops in foreclosure filings between November and December, plus double-digit drops between December 2010 and December 2011.
In fact, among the country’s top 10 states for foreclosure activity, nine showed an annual foreclosure filing reduction.
Only Delaware worsened.
It’s also noteworthy that just 4 states accounted for half of last month’s total foreclosure filings.
Foreclosures are heavily concentrated, in other words. By contrast, the last 1% of activity is spread across 14 states.
As a Salt Lake City home buyer — first-timer or investor — foreclosures can be a great way to find value.
According to the National Association of REALTORS®, distressed homes typically sell at “deep discounts“ as compared to like, non-distressed homes. However, when you buy a foreclosure home from a bank, it’s different from buying a home from a “person”. Purchase contract negotiations are different and months may pass before your closing is approved.
If you’re buying foreclosure, therefore, seek the help of a professional real estate agent. Real estate agents have experience working in the process-heavy world of foreclosures and can help you come out ahead.
